Why More Banks are Migrating to the Cloud
While security and performance concerns have historically hampered cloud adoption for banks, research firm McKinsey notes that more than half of financial firms plan to move between 50 and 100 percent of their IT environment to the cloud in the next five years.
Why? In large part, this stems from the ubiquitous nature of cloud services. Banks are now familiar with cloud models. Whether public, private or hybrid, the cloud offers the benefit of on-demand compute resources, storage and software on a pay-per-use basis.
Benefits include reduced upfront capital spending and increased IT agility. The are some some drawbacks, however, including challenges with evolving security and compliance requirements that see financial firms responsible for end-to-end protection of data, no matter where it resides.
Why HCI Often Makes Sense in Financial Services
For banks and credit unions that feel more comfortable retaining at least some workloads onsite, hyperconverged infrastructure is a popular choice. HCI deploys an integrated model that virtualizes and combines storage, compute, security and network resources into a single platform, and banks get the benefit of complete control over their environment along with the ability to easily scale up on-demand. In addition, HCI offerings are purchased from a single vendor.
Unlike multicloud environments that require IT to manage disparate offerings and interactions, HCI compiles common functions into a unified framework for ease of access and control.
It’s worth noting that HCI deployments require a mix of CapEx and OpEx to deliver on operational potential, meaning banks must closely monitor costs over time to ensure they’re getting the best return on investment.
What Is Metered Consumption in Financial Services?
Metered consumption — also known as metered billing or consumption-based — offers a new approach to accessing data center resources on demand.
Instead of purchasing and maintaining data center hardware, metered consumption simplifies the process with provider-managed hardware; organizations effectively lease access to the infrastructure. Many organizations opt for hyperconverged infrastructure within the metered consumption model, which is not an alternative to HCI but simply a method of paying for onsite hardware in a way that reduces capital expenditures, similar to the cloud.
Now offered by industry leaders such as Dell, HPE and Cisco, metered environments include robust automation and access functionality to streamline use and deployment, all under pay-as-you-go models that include the ability to “flex up” services as required. And because metered hardware often lives on-premises, banks and credit unions enjoy greater oversight of compliance and regulatory obligations.
Choosing Between the Cloud and HCI
The cloud offers the lowest bar to entry for banks. With access to on-demand services and software backed by a history of reliability and robust security frameworks, making the move to the cloud makes sense as demand for self-service transactions and improved data analytics ramps up. Multicloud environments can increase both complexity and cost, however.
HCI leaves resources onsite but moves away from traditional three-tier architecture for compute, networking and storage, streamlining management and simplifying control. Such an infrastructure can pose challenges for banks looking to maximize ROI over time.
Metered consumption combines key features of both cloud and HCI to create a new operational approach. By leveraging robust automation, accessibility and security controls tied to on-premises hardware but managed by trusted providers, banks can attain improved compliance, enhanced control and reduced complexity.
These data storage and management solutions aren’t mutually exclusive; organizations can deploy several simultaneously and many choose to do exactly that. Before proceeding down any path, it’s a good idea for financial institution IT leaders to have a conversation with an experienced partner to consider the right mix of options for their own situation.